Hiring a New Offshore Software Company? Watch for These Red Flags

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Determining whether a potential outsourcing partner is a good fit is challenging, especially when you’re separated by half the world. The only way to really know that you’ve found a great offshore software development company is to give them a try, but there are a few telltale early signs of a sub-par vendor if you know what to watch for.

Here are 3 types of warning signs to look for during your first few interactions with a possible vendor.

Cultural Issues

Cultural gaps are annoying at best, but at worst can quickly sink a project.

Speaking English isn’t always enough for success. It’s possible for a vendor to speak and write English very well, but still not have a good grasp on how we communicate effectively here in the U.S. If a vendor doesn’t communicate with decent U.S. business etiquette, it usually means that they lack deep experience working with U.S. clients – and that’s a red flag.

Keep track of how many oddball expressions the vendor uses:

  • Salutations like “Greetings for the day” when starting an email
  • The term “web designing” as a verb
  • The phrase “please wait for me” instead of “I will let you know”
  • The word “Not” to start a sentence
  • The word “revert” instead of “get back to you”

Management/Professionalism Issues

Some vendors have solid experience and good cultural awareness, but as a business, they are immature and can’t offer the level of professionalism that some clients need.

Watch for things like:

  • Over-aggressive sales practices. A pushy salesperson who reaches out via email, phone, Skype, etc. all at once is normal in some countries, but not here in the U.S.
  • Sending out poorly organized work samples. Expect a polished list of case studies with references rather than a massive list of “sites we’ve done.” For every work sample, be sure you’re being told exactly what they did for that client, and how they did it.
  • Inappropriate sharing of information. Many vendors will happily share a username/password to other clients’ online systems, including admin sections where sensitive data may be stored – a potentially risky violation of privacy. We see this one a lot, particularly in India and China, but also in Eastern Europe.
  • Overstating availability and guarantees beyond reason. Every time I hear a vendor say, “We work 24/7 for you and are always available,” I wonder how miserable those graveyard shift developers must be – I certainly don’t want them on my project. Also be aware of statements like, “We guarantee our work for life,” or the offer of zero-down projects with excessive guarantees. Professional companies don’t say things like this.
  • Suspicious rate card. A solid, experienced company will have a clear and concise way of describing their rates, usually with a tidy, one-page PDF. Watch out for companies who have a wide range of rates (e.g., $9/hr all the way up to $30/hr within a team) – this is a sure sign that a company has lots of junior resources that they want to put to work. Also, watch out for ambiguity in the roles/titles, and too much breakdown into junior/mid/senior resources – this usually means that the company is still figuring out their delivery mechanisms

Skills Deficiencies

At the end of the day, it’s the skill level of the developers and the PMs that will make or break your project. Interviewing the developers is the best way to vet them, but in the meantime watch for these signals that the company might be short on serious tech skills:

  • The jack-of-all-trades. Ask the company what their best technical skills are, and if they give you a list of more than about 3 things, be suspicious. Only very large companies can be excellent at numerous skills, and a smaller company that claims to be good at a laundry list of skills is usually mediocre at best.
  • Their most accomplished developers aren’t around. When a company shares an impressive accomplishment with you, ask them “Can we get that same developer on our project? Can we talk to him/her?” If they aren’t able to produce any of the developers who did their most impressive work, they are likely experiencing high attrition and highly skilled developers may not be available. Or worse, they are exaggerating their claims.
  • Cannot provide a named, dedicated project manager. If the vendor plans to assign a project manager to your engagement, ask if you can meet the project manager they have in mind and chat with the PM about the project. Even if they aren’t sure which PM you’ll get, they should be able to provide someone for you to talk to. If they can’t, ask them if they have dedicated project managers or if they simply assign a tech lead and call them a project manager. A tech lead who is doing client communications is no substitute for a dedicated project manager.

On their own, none of these red flags are enough to stop talking to a potential outsourcing partner, but if you’re shopping for a new vendor you’d be wise to pay attention to these sometimes-subtle signs of trouble ahead. If you identify one of these risks as you evaluate vendors, ask the vendor directly about the risk you are perceiving and don’t accept an answer that doesn’t feel right. The time and energy you spend vetting vendors early-on is nothing compared to the pain of discovering that your vendor isn’t as professional or skilled as you were led to believe.

Dave Hecker

Co-Founder at SourceSeek at SourceSeek
Dave is a seasoned technology executive focused software delivery, quality, process, and helping clients succeed at international software outsourcing.